SATS aims to scale group revenue to exceed S$8b by FY29 (financial year ending 31 Mar 2029), with a target EBITDA margin and return on equity (ROE) of at least 20% and 15%, respectively. This will be done by:
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sustaining its position as Asia’s top aviation caterer, while also penetrating deeper into high value segments of ready-to-eat meals in key markets.
4QFY25 revenue grew 10.4% y-o-y to S$1.5b.
Growth was broad-based across both Gateway Services (+10.1% y-o-y) and Food Solutions (+11.4%), underpinned by volume growth and higher rates. Flights handled and cargo processed improved 5.6% and 11.0% y-o-y, respectively, while gross meals produced rose 3.4% y-o-y. 4QFY25 operating profit increased 22.0% y-o-y to S$108.3m on a 70bps expansion of EBIT margins to 7.3%.
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We note that SATS also recorded S$7.9m worth of non-operating expenses during the quarter relating to strategic portfolio adjustments (e.g. impairment charges). Altogether, PATMI was up 18.3% y-o-y at S$38.7m, but down 45.0% q-o-q, with the final quarter of the financial year being the weakest seasonally.
FY25 results were in line with our expectations.
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Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
